Singapore stocks rise in response to gains in HK, Dow futures

TRADING in the local stock market got off to a cautious but firm start to the week with the Straits Times Index rising 3.78 points to 2,660.65 in response to a 150-point rise in the Dow futures and a 0.9 per cent gain for the Hang Seng Index. Turnover amounted to 1.3 billion units worth S$1.06 billion and excluding warrants there were 234 rises against 132 falls in the whole market.

Of the dollar volume, S$744 million or 71 per cent was done in the 30 STI components. DBS, which released its Q4 and full-year figures on Monday, fell S$0.06 to S$13.62 on volume of 9.6 million, contributing S$132 million towards turnover.

"People chased the share up in the morning, then sold in the afternoon," said a dealer. "Classic case of buy in anticipation, sell on news." DBS's intraday high was S$13.94.

In commodities sector, shares of Wilmar International were unchanged at S$3.16 on volume of 12.9 million. The company last week reported a 4 per cent drop in core net profit for 2015 to S$1.16 billion. Fourth quarter profit was 15 per cent lower at S$350.4 million.

OCBC Investment Research said it has tweaked its estimates for Wilmar slightly after the results, lowering its FY16 core earnings by 2.2 per cent, whilst pushing up its valuation peg from 12x to 12.5x FY16F earnings per share, which in turn raises its fair value from S$3.27 to S$3.34.

"However, in light of the strong run-up prior to the results, we downgrade our rating to Hold," said the broker.